By Delbert Wapass, Wallace Fox and Shane Gottfriedson
Prince George Citizen, May 29, 2019
Most Canadians are aware Canada’s First Nations face tough obstacles, from poverty to inadequate housing and from lack of access to clean drinking water to a growing youth population that feels left out of the country’s future.
At the same time, the country faces its own challenges, particularly around energy. A decade of gridlock has jammed any reasonable prospect that Canadian oil, a main contributor to the country’s economy, will reach global markets. So, Canada is forced to sell its energy products to the US at a deep discount, and the country misses out on some $80 million per day in lost opportunity -- funds that might have been put toward decarbonisation and fighting climate change.
A growing group of Indigenous leaders believes these challenges can be met through Project Reconciliation -- the purchase of a majority stake in the Trans Mountain pipeline and expansion project (TMX) by an Indigenous coalition and the creation of an Indigenous sovereign wealth fund. Most of the income from the pipeline would be channelled into this fund that would be invested, like the commodity export sovereign wealth funds of Norway, Abu Dhabi and Kuwait, in a professionally managed diversified portfolio of international financial and real assets for long-term returns to Indigenous communities.
These returns would, in turn, support investments in Indigenous community sustainable infrastructure from adequate housing, healthcare and Indigenous businesses, to low-carbon energy.
A majority investment by Indigenous communities in TMX is an historic opportunity for us to gain a seat at the table and the ability to ensure the project is built and managed to the highest environmental standards. Equally important, a majority stake gives Indigenous Peoples a share in the long-term energy project’s revenue, and puts us on a path toward economic self-determination and security and sustainability. It allows us to transform from managers of poverty to managers of wealth.
In short, we see this project as Canada’s pipeline to reconciliation.
Our majority stake would be backed by long-term shipping agreements, so there would be no need for public funds to backstop our purchase, nor any risk to investors. And the cost of capital would be low enough that the profits generated through the shares, about $20 billion over TMX’s 50-year lifespan, would provide an important source of sustainable Indigenous investment to advance the climate-change agenda and address urgent infrastructure needs in our communities.
Project Reconciliation would give our communities a crucial opportunity to grow our wealth through the long-term, sustainable revenue that TMX and the Indigenous sovereign wealth fund will generate, providing a new model for how business could be conducted in Canada in the 21st century.
Canadians understand Indigenous reconciliation is a process of fostering mutual respect among Indigenous and non-Indigenous communities, sharing responsibility and empowerment, and working to address historic wrongs. Project Reconciliation lines up perfectly with those key goals.
Consider the impact of a successful, properly built Reconciliation Pipeline, operated to the world’s highest environmental standards:
Each year, 20 percent of our project’s cash flow would be distributed directly to owners - Western Canada’s Indigenous communities - while 80 percent would go to a professionally managed Indigenous sovereign wealth fund. Returns from this fund would be available to Indigenous communities for re-investment in other sustainable infrastructure projects like renewable energy, energy-efficient on-reserve housing and other small carbon-footprint, GHG-reducing, climate-friendly initiatives, allowing us to play a positive role in helping meet Canada’s greenhouse gas and climate change commitments.
Leveraging the power of this sovereign wealth fund as a subsidiary of Project Reconciliation, we expect the fund would grow to become an important investment pool, assuming about $180 million per year of distribution from TMX revenues.
That’s why we think the fund provides the missing piece to many discussions about Indigenous reconciliation, and how we advance our Indigenous goals of economic self-determination, financial security, real poverty elimination and environmental stewardship.
More broadly, we think the approach encourages equality, empowerment, opportunity and shared responsibility over the natural resources of traditional Indigenous lands. In turn, that ensures the highest standards for environmental, climate change, and tanker and marine safety policies. The purchase would also help the federal government get the export capability it needs for Canadian oil and, as a result, would give Canada’s national economy a significant boost.
Project Reconciliation and the creation of the Indigenous sovereign wealth fund would become indispensible tools to address Indigenous reconciliation, poverty eradication, market access and the climate agenda. When it comes to a safe, secure, well-managed pipeline and a market-funded mechanism to invest in low-carbon, sustainable infrastructure, we think our interests and those of other Canadians are aligned. Let’s seize this unique opportunity; let’s take Canada’s pipeline to reconciliation before the opportunity passes us by.
Delbert Wapass is Executive Chair, Project Reconciliation; former Chief, Thunderchild First Nation; and Vice Chair, Indian Resource Council; Wallace Fox is Alberta Regional Director, Project Reconciliation; former Chief, Onion Lake Cree Nation; and Chair, Indian Resource Council; and Shane Gottfriedson is B.C. Regional Director, Project Reconciliation; former Chief, Tk’emlúps te Secwépemc; former Tribal Chief, Shuswap Nation; and former Regional Chief of B.C.